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This two weeks, Shanghai, Beijing and other construction steel, hot rolled, cold rolled steel prices have fallen sharply, down in the 200-300 yuan / ton, the decline in some species even reached 400 yuan / ton. Thermal paper market today, for example, the Shanghai area of ??4.5 * 1500 * C & P volume price has dropped to 3730 yuan / ton, northern areas such as the Tianjin market with the specifications of the S & P volume prices and even below the 3600 / ton, the market is a desolate, a wait-and-see atmosphere strong, turnover was down, increased pessimism, almost all species have reached a record low since the two and a half years.

Since April this year, the domestic steel market prices rebounded after the fall, basically in a unilateral decrease in state, the price of the waves down exploration, why the recent steel will be a significant drop in it?

I believe that the main reasons: First, high temperature and rainfall, manufactured off-season, the shrinking market demand, turnover in the doldrums, not enough to support price stability operation. Production, inventory is too high, and highlights the contradiction between supply and demand, increased market pressures. Third, traders pessimistic state of mind, the re-emergence of panic lower sales phenomenon. Fourth, the consolidation of the national financial instruments market to further increase the financial pressure of the steel trade and industry, the steel trade and capital chain has been to the brink of collapse.

So, the current steel prices has been in the end, whether gradually improved it? I believe that the need to pay attention to the following four aspects:

First, the decline of the steel market prices have been passed to the upper reaches of ore, coke and other raw materials markets. Data show that since early July, the Tangshan area, Carbon Billet fallen to 320 yuan / ton, a drop of up to 180 yuan / ton last weekend, at 3280 yuan / ton, while the major metallurgical coke, iron ore and other raw material prices have recently accelerate the downside, the weekly decline reached more than 30 yuan / ton. Raw materials sharp price Budie of, so the only cost of market price support factors greatly weaken, further open the downside, it would also suppress the rebound in steel prices space.

Secondly, the steel is again a substantial markdowns. Following Baosteel, Anshan Steel, Wuhan Iron and sheet steel prices for sharp decline in July and August, ex-factory price of construction steel steel prices last week, such as Sha Steel River Steel and Rizhao, sharp decline in the plate, screw, wire and rebar and other ex-factory price , some of the resources a drop of more than 200 yuan / ton. But even so, prices and market prices are still in the inversion state, the traders of their making it up, margins are still disappointed, orders are not enthusiastic. Steel prices continued to drop, the steel itself is made under the pressure of high inventory, sales difficulties and financial strain, and many other upset, but this initiative is also a serious impact on the already sluggish market further dispersion of confidence, business pessimism.

Again, the scale of the cut-off delay is difficult to come. A survey shows that small and medium steel mills in Tangshan region, more than 90% blast furnace operating rates, almost all short-term small and medium steel mills do not cut, limited production plan. The steel mills insist that does not cut is nothing more than the cost of raw materials inventories, market share and the capital chain considerations, but a sustained high yield steel inventories will make more and more, the constant increase in inventory will also make the market price increasing pressure, in such a high yield, inventory under the weight of steel price reversal is not possible. However, if steel prices again were sharply lower, making the steel mills of the marginal profit is zero, then the steel will have to choose the cut-off.

Finally, capital is the most important link. As we all know, the steel trade are capital-intensive industry, require a lot of money in order to operate, under current market conditions, the steel trade and business demand for capital-hungry. Steel trade and industry in recent years an empty single pledge, repeated pledge sets of loan, Piandai credit problems are frequent, leading to the banks of the steel trade and industry funds continue to tighten, plus the steel prices in recent months further down the steel trade providers of capital chain has come to the edge of breaking at any time. The recent concentration and control of civil paper market, the more so that the steel trade, capital flows blocked the trading difficulties, some of the steel trading business had substantial price cuts Paohuo, in order to return the funds.